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Telecom panel fixes minimum spectrum usage charge at 3% (Relevant for GS Mains Paper III, Topic: Science and Technology)

View of Telecom Commission
The Telecom Commission stuck to its position in favour of using a weighted average formula to calculate the annual fee that telecom companies pay for using airwaves.
However, it has decided to fix a minimum rate of three per cent of a company’s adjusted gross revenue as spectrum usage charge (SUC), in a bid to move towards a uniform rate for all players.

Cabinet approval: Final decision on Method to levy Spectrum usage charges
The Cabinet approval on the recommendations of Telecom Commission will be final..

Possible implications
With the weighted average, the usage charges in percentage terms would come down for spectrum in the 2300 MHz band, bought in the 2010 auctions. Airtel's SUC will fall from 4.9 per cent to 3.8 per cent. Reliance Jio will pay about 3 per cent instead of about 5 per cent.

View of TRAI
The Union Cabinet had last month decided to refer back the issue of SUC to TRAI for its recommendations.The regulator had said that the weighted average formula, as suggested by the telecom department, for calculating the annual charge that operators pay to use airwaves “is at best a temporary solution”, and had proposed its own formula to calculate the SUC. TRAI has been pitching for a flat SUC.
However, the telecom department was unable to make any changes towards a flat SUC after objections from the Auditor-General.

About TRAI and Telecom Commission
TRAI is a regular of the telecom sector and Telecom Commission has an objective of promotion of telecommunications in India.



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